U.S. v. Gray

Decision Date18 September 1996
Docket NumberNo. 95-50533,95-50533
Citation96 F.3d 769
Parties112 Ed. Law Rep. 637 UNITED STATES of America, Plaintiff-Appellee, v. Kevin GRAY, Gary Thomas, and Troy Drummond, Defendants-Appellants.
CourtU.S. Court of Appeals — Fifth Circuit

Richard L. Durbin, Jr., Asst. U.S. Attorney, Office of the United States Attorney, San Antonio, TX, James H. DeAtley, Office of the United States Attorney, Austin, TX, for United States of America, plaintiff-appellee.

Walter Mabry Reaves, Jr., West, TX, for Kevin Gray, defendant-appellant.

Appeal from the United States District Court for the Western District of Texas.

Before DUHE and DENNIS, Circuit Judges, and DUVAL, 1 District Judge.

DUVAL, District Judge:

PROCEDURAL BACKGROUND

By grand jury indictment, Appellants Kevin Gray (hereinafter "Gray"), Gary Thomas (hereinafter "Thomas") and Troy Drummond (hereinafter "Drummond") (hereinafter collectively "appellants") and others were charged with conspiracy to commit mail and wire fraud, and with various counts of mail and wire fraud in violation of 18 U.S.C. §§ 2, 371 2, 1341 3, 1343 4 and 1346 5. All three were convicted of the conspiracy charge; Gray was convicted of two counts of wire Specifically, Gray, Thomas and Drummond challenge the sufficiency of the evidence supporting their conspiracy, mail fraud and wire fraud convictions. All argue that the scheme was merely a breach of fiduciary duty but not mail or wire fraud. Appellants, Gray and Thomas also challenge portions of the jury charges read to the jury. Furthermore, Gray and Thomas contend that § 1346 is unconstitutionally vague as it is applied to them.

fraud (Counts 13 & 14); Thomas was convicted of three counts of wire fraud (Counts 6, 7, & 8); and Drummond was convicted of four counts (Counts 2, 3, 4, & 5). Each filed timely motions for judgment of acquittal which were denied by the District Court. Each was sentenced to three years of probation and 50 hours community service; Thomas received a $1500 fine while Gray and Drummond received a $1000 fine. Each now appeals.

FACTUAL BACKGROUND

The indictment charged members of the mens' basketball coaching staff at Baylor University, and others, with executing a fraudulent scheme to establish academic eligibility for five transfer students to play basketball at Baylor during the 1993-94 academic year. In its simplest terms, the coaches helped the five players, recruited from two-year colleges, to obtain the credits required for eligibility and possibly scholarships by providing these students with written course work or answers to correspondence exams, which were then sent to the sponsoring schools as the students' work. 6

Gray and Thomas were assistant mens' basketball coaches in 1993. Drummond was an assistant basketball coach at Westark Community College in Ft. Smith, Arkansas in early, 1993. Thereafter, in August, 1993, Drummond was hired by Baylor as the "restricted earnings coach."

Baylor University was a member of the Southwest Conference and Division 1A of the NCAA. The NCAA regulations fix academic eligibility requirements for student athletes transferring from two-year colleges to four-year Division 1A schools like Baylor. Failure to comply with the NCAA's rules could result in the imposition of sanctions.

Five students were focused upon during the trial of this matter. Those students were Jerome Lambert, Marcus Thompson, Shannon Brantley, Jason Ervin and Tyrone Davis. The specific facts surrounding the coaches efforts on behalf of these students is not disputed and thus, not germane to the legal analysis.

ANALYSIS
I

The defendants contend that insufficient evidence supports their convictions for conspiracy, mail fraud and wire fraud. It is fundamental that we, as an appellate court, owe great deference to a jury verdict. Therefore, in assessing a challenge to the sufficiency of the evidence, we will consider the evidence in the light most favorable to the verdict and will afford the government the benefit of all reasonable inferences and credibility choices. United States v. Walters, 87 F.3d 663, 667 (5th Cir.1996) (citing United States v. Ayala, 887 F.2d 62, 67 (5th Cir.1989)). The evidence is sufficient if a rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt based upon the evidence presented at trial. Walters, 87 F.3d at 667.

To prove conspiracy pursuant to 18 U.S.C. § 371, the government must prove: (1) an agreement between two or more persons, (2) to commit a crime, and (3) an overt act committed by one of the conspirators in furtherance of the agreement. United States v. Mackay, 33 F.3d 489 (5th Cir.1994). That statute further requires the government to prove that a conspiracy existed, that the defendant knew of the conspiracy and that he knowingly and voluntarily joined it. Id.

To prove mail fraud pursuant to 18 U.S.C. § 1341, the government must prove: (1) a scheme to defraud, (2) which involves the use of the mails, (3) for the purpose of executing the scheme. United States v. Nguyen, 28 F.3d 477, 481 (5th Cir.1994); United States v. Pazos, 24 F.3d 660, 665 (5th Cir.1994).

To prove wire fraud pursuant to 18 U.S.C. § 1343, the government must prove (1) a scheme to defraud and (2) the use of, or causing the use of, wire communications in furtherance of the scheme. United States v. Loney, 959 F.2d 1332, 1337 (5th Cir.1992).

The indictment alleged and the jury was charged that Gray, Thomas and Drummond could have committed fraud under either of two theories: (1) they deprived victims of property, and (2) they deprived victims of the right to honest services. The victims of the scheme alleged in the indictment included Baylor, Westark Community College and others.

Gray, Thomas and Drummond make a number of arguments in support of their contention that sufficient evidence does not support their convictions for conspiracy, mail fraud and wire fraud. They argue first that the mail and wire fraud statutes do not encompass the type of property deprivation at issue, i.e. scholarships and degrees, in this case relying on United States v. Walters, 997 F.2d 1219 (7th Cir.1993). Second, Gray, Thomas and Drummond advance the argument that the government seeks to criminalize mere deceit alleging that they lacked the intent to either harm the victims or to obtain personal benefit relying on United States v. Ballard, 663 F.2d 534 (5th Cir.1981), modified, 680 F.2d 352 (5th Cir.1982, Unit B). 7 We address these separately.

A

Gray, Thomas and Drummond first argue that the mail and wire fraud statutes do not encompass the type of property deprivation at issue in this case. Specifically, appellants urge that the granting of scholarships and degrees was simply an incidental property loss not amounting to fraud relying on Walters, 997 F.2d 1219 (7th Cir.1993). This challenge lacks merit.

Walters, an agent, signed 58 college football players to contracts while they were still playing pursuant to the NCAA rules. These contracts violated NCAA rules. Id. at 1221. After completing college, many of these players reneged on their agreements with Walters. Id. Thereafter, Walters and others were indicted for mail fraud. The fraud alleged: causing the universities to pay scholarship funds to athletes who had become ineligible as a result of the agency contracts. After finding that the "scheme or artifice to defraud" clause and the "obtaining money or property" clause of 18 U.S.C. § 1343 contemplate a transfer of some kind, the court reversed the convictions holding that losses that occur only as byproducts of a deceitful scheme do not satisfy the statutory requirement. Id. at 1225.

Walters is distinguishable from the instant case. Indeed, the conduct in Walters occurred prior to the enactment of 18 U.S.C. § 1346. 8 Thus, Walters holding that 18 U.S.C. § 1343 contemplates "a transfer of some kind" is inapplicable to the acts alleged in the instant case since they occurred after the enactment of 18 U.S.C. § 1346.

As with any question of statutory meaning, we begin with the language of the statute. Brumley, 79 F.3d at 1434-35 (citing Kellogg v. United States (In re West Texas Marketing Corp.), 54 F.3d 1194, 1200 (5th Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 523, 133 L.Ed.2d 430 (1995)). In determining a statute's plain meaning, we assume that absent any contrary definition, "Congress intends the words in its enactments to carry their ordinary, contemporary, common meaning." Brumley, 79 F.3d at 1435 (citing Pioneer Investment Services v. Brunswick Associates, 507 U.S. 380, 388, 113 S.Ct. 1489, 1495, 123 L.Ed.2d 74 (1993) (internal quotation marks omitted)). As the Supreme Court has stated: "There is, of course, no more persuasive evidence of the purpose of a statute that the words by which the legislature undertook to give expression to its wishes." Id. (citing Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 3250, 73 L.Ed.2d 973 (1982) (internal quotation marks omitted)).

The statute in question, 18 U.S.C. § 1343, in pertinent part, provides:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses ... for the purpose of executing such scheme or artifice, shall be fined under this titled or imprisoned not more than five years, or both....

Nothing in the term "scheme or artifice to defraud" mandates "a transfer of some kind" as defined in 18 U.S.C. § 1346 which states that:

For the purposes of this chapter, the term "scheme or artifice to defraud" includes a scheme or artifice to deprive another of the intangible right of honest services.

Therefore, Walters holding that 18 U.S.C. § 1343 contemplates a "transfer of some kind" is inapplicable to situations occurring after the enactment of 18 U.S.C. § 1346. Indeed, it is uncontested that appellants actions occurred after the enactment of 18 U.S.C. § 1346. Further, it is clear that a...

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